ISIS PHARMACEUTICALS, INC.
10B5-1 TRADING PLAN
This 10b5-1 Trading Plan, (the "Trading Plan"), between ISIS
PHARMACEUTICALS, INC. ("Isis") and GOLDEN TRIANGLE SECURITIES LLC ("Broker"), is
entered into on February 26, 2002. Capitalized terms not otherwise defined
herein will have the meanings given to them in Exhibit A attached hereto.
1. RECITALS.
(a) This Trading Plan is entered into between Isis and
Broker for the purpose of establishing a trading plan that complies with the
requirements of Rule 10b5-1(c) under the Exchange Act.
(b) The purpose of this Trading Plan is to provide a
mechanism by which eligible Sellers can orderly dispose of a portion of each
Seller's holdings of Stock, including Stock that such Seller has the right to
acquire under the Options.
(c) Isis and Broker hereby agree as follows:
2. APPOINTMENT. Isis hereby appoints and authorizes Broker to
sell shares of Stock pursuant to the terms and conditions set forth below and in
the applicable Sellers Plan. Subject to the terms and conditions set forth
below, Broker hereby accepts such appointment.
3. SELLERS PLANS. Each Seller may establish up to three
individual Sellers Plans with Broker in any Sales Period. In connection with
such Sellers Plans, each Seller will establish an account at Broker in the name
of and for the benefit of Seller (the "Plan Account"). Sales under each Sellers
Plan cannot begin until the Broker receives (i) the Plan Shares, to the extent
such Plan Shares are currently owned by Seller, (ii) a properly executed Seller
Representation Letter and (iii) a properly completed and executed Sellers Plan,
including an acknowledgment by Isis.
4. OBLIGATIONS OF BROKER. With respect to each Sellers Plan,
Broker will have the following obligations:
(a) Broker will sell the Plans Shares for the account of
each Seller according to the terms of the Seller's Sellers Plan.
(b) Broker will not sell any Stock when broker is in
possession of any material nonpublic information concerning Isis or its
securities.
(c) Once a Sellers Plan becomes effective, Broker will
not allow Seller to exercise, any influence over how, when or whether to effect
sales of Stock pursuant to the Sellers Plan.
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(d) Broker will withdraw Stock from Seller's Plan Account
in order to effect sales of Stock under Seller's Sellers Plan. Broker will
exercise Options to effect such sales according to the Seller's Option Priority
Guidelines.
(e) Broker will deliver the proceeds from each sale of
unrestricted Stock effected under a Sellers Plan to Seller's Account on a normal
three-day settlement basis less any commission, commission equivalent, xxxx-up
or differential and other expenses of sale to be paid to Broker. With respect to
each sale of restricted Stock, Broker will deliver the net proceeds from such
sales as soon as reasonably practicable.
(f) Broker will, in connection with the exercise of
Options, remit to Isis the exercise price thereof along with such amounts as may
be necessary to satisfy withholding obligations. These amounts will be deducted
from the proceeds of the sale of the Stock.
(g) To the extent that any Stock remains in the Plan
Account upon termination of the Sellers Plan, Broker agrees to return such Stock
promptly to the Seller.
(h) Broker agrees to conduct all sales pursuant to each
Sales Plan in accordance with the manner of sale requirement of Rule 144 of the
Securities Act and in no event will Broker effect any sale if such sale would
exceed the then-applicable amount limitation under Rule 144 or will violate the
"short-swing profit" provisions of Section 16 of the Exchange Act. Broker will
file Forms 144 on behalf of Seller as required by applicable law.
(i) Promptly after each Sale, Broker will advise Seller
in writing as to the number of shares of Stock sold, the date of each sale and
the sales price.
(j) Broker will suspend or terminate a Sellers Plan and
cancel any pending sale upon notice from Isis of a Suspension Event (such notice
to specify termination or suspension of the Sellers Plan). In the event of a
suspension, Broker will cancel any open orders for sales of Plan Shares and will
cease placing orders for Sales of Plan Shares under the Sellers Plan until
Broker receives written notice from Isis stating that the relevant Suspension
Event is no longer in effect. Upon Broker's receipt of notice from Isis, Broker
may resume placing orders for sales of the Plan Shares in accordance with the
terms and conditions of this Trading Plan and the applicable Sellers Plan;
PROVIDED, HOWEVER, that Broker will not reinstate any orders cancelled due to a
suspension and will not place any orders that would have been placed during the
suspension.
(k) Broker will not sell more than an aggregate of 30,000
shares on any single Trading Day for any individual Seller under all the Sellers
Plans established by such Seller. Notwithstanding the foregoing, Broker may sell
more than this specified limit if (i) such sale is reasonably necessary to
facilitate the exercise of Options that will expire within three Trading Days of
such sale and (ii) the Company's Chief Financial Officer has authorized such a
trade according to the notice provisions below.
5. TERMINATION; AMENDMENT.
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(a) TRADING PLAN. This Trading Plan may be Terminated by
Isis at any time upon written notice to Broker. The parties hereto may amend
this Trading Plan in writing by mutual written agreement.
(b) VOLUNTARY TERMINATION OF SELLERS PLAN. Seller may
terminate a Sellers Plan only during the last five Trading Days of a Sales
Period by providing Broker and Isis advance written notice. The terminations
will become effective on September 30 of the Sales Period in which proper
termination notice was given.
(c) AUTOMATIC TERMINATION OF SELLERS PLAN. An applicable
Sellers Plan will automatically terminate on any of the following dates: (i) the
date Broker is required to terminate the Sellers Plan under Section 4(j) of this
Trading Plan, (ii) the 90th day following the date Broker receives notice of the
death of the Seller or of Seller's termination from Isis, (iii) the date Isis or
any other entity publicly announces a tender or exchange offer with respect to
the Stock or a merger or acquisition of Isis, or (iv) the date Broker receives
notice of the commencement or impending commencement of any proceeding relating
to or triggered by Seller's bankruptcy or insolvency.
(d) TERMINATION FOR BREACH. Isis may terminate a Sellers
Plan immediately upon the breach of a representation or covenant contained in
the applicable Seller's Seller Representation Letter.
(e) NO AMENDMENT OF SELLERS PLAN. Seller may not amend a
Sellers Plan.
6. GENERAL.
(a) The prices and share amounts set forth in this
Trading Plan and in each Sellers Plan will be automatically adjusted on a
proportionate basis to take into account any stock split, stock dividend or any
change in the capitalization similarly affecting the Stock of the Isis that
occurs during the Sales Period.
(b) This Trading Plan, including exhibits, constitutes
the entire agreement between the parties with respect to this Trading Plan and
supercedes any prior agreements or understandings between the parties with
regard to the Trading Plan.
(c) Any notice required to be given under this Trading
Plan or a Sellers Plan will be addressed to the relevant party at the address
set forth below.
To Broker: Golden Triangle Securities LLC
XX Xxx 000000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx and Xxxxx Xxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
To Isis: Isis Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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Attn: Executive Vice President
Fax: 000-000-0000
Phone: 000-000-0000
with copies to: Xxxxx Xxxxxx
Fax: 000-000-0000
To Seller: The contact information specified in the
applicable Seller Representation Letter.
Notice will be deemed sufficiently given for all purposes upon the
earlier of: (a) the date of actual receipt; (b) if mailed, three (3) calendar
days after the date of postmark; (c) if delivered by overnight courier, the next
business day such overnight courier regularly makes deliveries; or (d) if sent
by facsimile, when the sender's facsimile system generates a message confirming
successful transmission of the total number of pages of the notice unless,
within one business day after the transmission, the recipient informs the sender
that the recipient has not received the entire notice.
(d) This Trading Plan may be signed in counterparts, each
of which will be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
(e) If any provision of this Trading Plan is or becomes
inconsistent with any applicable present or future law, rule or regulation, that
provision will be deemed modified or, if necessary, rescinded in order to comply
with the relevant law, rule or regulation. All other provisions of this Trading
Plan will continue and remain in full force and effect.
(f) This Trading Plan and any Sellers Plan is not an
employment contract and nothing in such plans will create in any way whatsoever
any obligation on a Seller's part to continue in the employ of Isis, or of Isis
to continue Seller's employment with Isis.
(g) In the event of any conflict between the provisions
of a Sellers Plan and those of this Trading Plan, the provisions of this Trading
Plan will control.
(h) The parties' rights and obligations under this
Trading Plan will bind and inure to the benefit of their respective successors,
heirs, executors, and administrators and permitted assigns.
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IN WITNESS WHEREOF, the undersigned have entered into this Trading Plan
as of the date first written above.
ISIS PHARMACEUTICALS, INC.
/s/ B. XXXXX XXXXXXXX
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B. Xxxxx Xxxxxxxx
Executive Vice President
GOLDEN TRIANGLE SECURITIES LLC
/s/ XXXXXX XXXXXX
-------------------------------------
Xxxxxx Xxxxxx
President
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EXHIBIT A
DEFINITIONS
"Daily Sales Amount" has the meaning set forth in the applicable Sellers Plan.
"Effective Date" means, with respect to a Sellers Plan, the date the Seller
Representation Letter was executed by Seller and accepted by Broker.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Options" means the outstanding stock options issued by Isis listed in the
applicable Sellers Plan.
"Option Priority Guidelines" has the meaning set forth in the applicable Sellers
Plan.
"Minimum Sales Price" has the meaning set forth in the applicable Sellers Plan.
"Plan Shares" means (i) the Stock and (ii) the Stock issuable upon exercise of
the Options, to be sold pursuant to the Sellers Plan.
"Rule 144" means Rule 144 under the Securities Act.
"Sales Period" The first Sales Period will begin on the effective date of this
Trading Plan and will end on September 30, 2002. Thereafter, Sales Periods will
begin every year on October 1 (beginning with October 1, 2002) and will end on
September 30 of the following year until this Trading Plan or the applicable
Sellers Plan is terminated.
"Sellers Plan" means a Sellers Plan in the form attached hereto as Exhibit B
entered into between Broker and a Seller.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Representation Letter" is the seller representation letter, a form of
which is attached hereto as Exhibit C.
"Seller" means Isis' executive officers, members of its Board of Directors and
other individuals specified by Isis who participate in the Trading Plan and who
have agreed to only sell Stock under the Trading Plan.
"Stock" means the common stock, $0.001 par value per share, of Isis.
"Suspension Event" means a legal, contractual or regulatory restriction that is
applicable to Seller or Seller's affiliates that does not permit the execution
of sales made under a Sellers Plan (other than any such restriction relating to
Seller's possession or alleged possession of material nonpublic information
about Isis or its securities subsequent to the execution of the Sellers Plan),
including, without limitation, (i) any restriction related to a merger or
acquisition, (ii) a stock
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offering requiring an affiliate lock-up, that would prohibit any sale pursuant
to the Trading Plan, or (iii) a potential violation of Section 16 of the
Exchange Act.
"Trading Day" means any day during the Sales Period that the Nasdaq Stock Market
is open for business and the Stock trades regularly on such day.
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EXHIBIT B
SELLERS PLAN
EFFECTIVE DATE: _________________
SELLER'S NAME: _______________
SELLER'S ACCOUNT NUMBER: _______________
COMMISSIONS:
PLAN SHARES:
___________ shares of Stock owned by Seller; and
___________ shares of Stock issuable upon the exercise of the Options
listed on the last page of this Sellers Plan.
OPTION PRIORITY GUIDELINES:
(PLEASE CHECK ONLY ONE OF THE FOLLOWING)
| | Exercise first those Options with the earliest expiration
date; or
| | Exercise first those Options with the lowest exercise price.
(PLEASE CHECK ONLY ONE OF THE FOLLOWING)
| | To complete sales under this Sellers Plan, Broker will sell
the Plan Shares owned by Seller first, before exercising any
Options (except if such Options are about to expire); or
| | To complete sales under this Sellers Plan, Broker will sell
the shares issuable upon exercise of the Options first, before
selling the Plan Shares owned by Seller.
IN THE EVENT THAT UNEXERCISED OPTIONS ARE ABOUT TO EXPIRE, BROKER WILL
EXERCISE SUCH OPTIONS ON OR BEFORE THE LAST TRADING DAY PRIOR TO THE EXPIRATION
DATE OF THE OPTIONS.
Broker will in no event exercise any Option if at the time of exercise
the exercise price of the Option is equal to or higher than then current market
price of the Stock.
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INSTRUCTIONS:
During the Sales Period, Broker will sell the Daily Sales Amount, if any, for
the account of Seller on each Trading Day under ordinary principles of best
execution at the then-prevailing market price; provided that Broker will not
sell any shares of Stock under a Sellers Plan at a price of less than the
Minimum Sales Price.
If, consistent with ordinary principles of best execution, Broker cannot sell
the Daily Sales Amount on any Trading Day, then the amount of such shortfall may
be sold as soon as practicable on the immediately succeeding Trading Day and on
each subsequent Trading Day as is necessary to sell such shortfall consistent
with the ordinary principals of best execution. If any shortfall exists after
the close of trading on the last Trading Day prior to the termination of this
Trading Plan or the applicable Sellers Plan, Broker's obligation and
authorization to sell such shares will terminate.
MINIMUM SALES PRICE:
| | $_______ per share (before deducting any commission,
commission equivalent, xxxx-up or differential and other
expenses of sale); or
| | The greater of (i) the 20-day trailing average closing sale
price of the Stock, as reported by Bloomberg (or, if such
trailing average price is not reported by Bloomberg, the
20-day trailing average closing sale price as calculated by
Broker, whose calculation shall be final and binding absent
gross error), or (ii) $_______ per share (before deducting any
commission, commission equivalent, xxxx-up or differential and
other expenses of sale); or
| | For each number of shares listed on the table below, the
Minimum Sales Price will be the price opposite such number of
shares.
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NUMBER OF SHARES MINIMUM SALES PRICE
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DAILY SALES AMOUNT (PLEASE CHECK ONLY ONE OF THE FOLLOWING):
| | Broker will set the Daily Sales Amount in its sole discretion;
or
| | _________ shares of Stock; or
| | an amount of Stock resulting in aggregate proceeds (after
deducting any commission, commission equivalent, xxxx-up or
differential, other expenses of sale, exercise prices (if
any), withholding taxes and other expenses of exercise) of
$________; or
| | ______ shares of Stock, EXCEPT if ________ or more shares of
Stock have been sold under this Sellers Plan within the ______
days preceding the current Trading Day, then the Daily Sales
Amount will be zero shares.
RELOAD FEATURE
| | On the first day of each Sales Period, unless this Sellers
Plan is otherwise terminated, new shares of stock will be
added as Plan Shares to this Sellers Plan equal to the greater
of (i) the number of Plan Shares in the preceding Sales Period
minus any shares not sold pursuant to the Sellers Plan during
the preceding Sales Period or (ii) the number of shares of
Stock subject to stock options held by Seller that will expire
during the then current Sales Period. If necessary to reload
the Plan Shares (as described above), the Options will be
updated to add the earliest to expire stock options of the
Seller until the Plan Shares have been reloaded.
Notwithstanding the foregoing, Options will not be added to
this Sellers Plan that will not vest within the then current
Sales Period.
OTHER INSTRUCTIONS:
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EXHIBIT C
SELLER REPRESENTATION LETTER
SELLER REPRESENTATION AND COVENANT LETTER
Date: __________________
Golden Triangle Securities LLC
XX Xxx 000000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Dear Xxxxx:
In consideration of your accepting orders to sell the Stock of Isis
Pharmaceuticals, Inc. ("Isis") under the Isis Pharmaceuticals
10b5-1 Trading
Plan (the "Trading Plan") and the Sellers Plan (as defined below), the Seller
makes the representations and agrees to the covenants set forth below.
All capitalized terms that are not otherwise defined herein shall have
the meanings ascribed to them in the Trading Plan. The terms of the Trading Plan
are incorporated herein by reference. In the event of any conflict between the
provisions of this letter and the Trading Plan, the provisions of the Trading
Plan will control.
Seller hereby appoints and authorizes Broker to sell shares of Stock
pursuant to the terms and conditions of the Trading Plan and the Sellers Plan
attached hereto and incorporated herein by reference as Exhibit I (the "Sellers
Plan"). Broker hereby accepts such appointment.
SELLER REPRESENTATIONS.
7. Sales of Stock under the Sellers Plan have been approved by an
authorized representative of Isis.
8. As of the date hereof, Seller is not aware of any material
nonpublic information concerning Isis or its securities. Seller is entering into
the Sellers Plan in good faith and not as part of a plan or scheme to evade
compliance with the federal securities laws.
9. The Stock to be sold under the Sellers Plan is owned free and
clear by Seller (subject, in the case of shares underlying Options, only to the
compliance by Seller with the exercise provisions of such options) and is not
subject to any agreement granting any pledge, lien, mortgage, hypothecation,
security interest, charge, option or encumbrance or any other limitation on
disposition, other than those which may have been entered into between Seller
and Broker or imposed by Rules 144 or 145 under the Securities Act.
10. Seller has had an opportunity to discuss the Sellers Plan with
his or her own advisors as to the legal, tax, business, financial and related
aspects of the Sellers Plan and has determined that the Sellers Plan meets the
affirmative defense criteria set forth in Rule 10b5-
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1(c). Seller has not relied upon Broker or Isis (or any person affiliated with
Broker or Isis) in connection with, Seller's adoption and implementation of the
Sellers Plan.
11. Seller acknowledges and agrees that, once the Sellers Plan
becomes effective, Seller does not have, and shall not attempt to exercise, any
influence over how, when or whether to effect sales of Stock pursuant to the
Sellers Plan.
SELLER COVENANTS.
12. While the Sellers Plan is in effect, Seller agrees not to (i)
sell any securities of Isis outside of the transactions contemplated by the
Trading Plan, (ii) enter into or alter any corresponding or hedging transaction
or position with respect to the Stock covered by the Sellers Plan (including,
without limitation, with respect to any securities convertible or exchangeable
into the Stock), and (iii) alter or deviate from the terms of the Sellers Plan.
13. Seller agrees to deliver to Broker the Plan Shares pursuant to
the Sellers Plan to be placed into Seller's Plan Account prior to the
commencement of sales under the Sellers Plan.
14. Seller agrees to make appropriate arrangements with Isis and
its transfer agent and stock plan administrator to permit Broker to furnish
notice to Isis of the exercise of the Options and to have underlying shares
delivered to Broker as necessary to effect sales under the Sellers Plan. Seller
hereby authorizes Broker to serve as Seller's agent and attorney-in-fact and, in
accordance with the terms of the Sellers Plan, to exercise the Options. Seller
agrees to complete, execute and deliver to Broker cashless exercise forms, in
sufficient form to allow for the exercise of Options pursuant to the Sellers
Plan at such times and in such numbers as Broker may reasonably request.
15. Seller will not, directly or indirectly, communicate any
information relating to the Stock or Isis to any employee of Broker or its
affiliates who is involved, directly or indirectly, in executing the Sellers
Plan at any time while the Sellers Plan is in effect.
16. Seller agrees to notify Broker's compliance office by
telephone or facsimile as soon as practicable if Seller becomes aware of the
occurrence of any Suspension Event. Such notice will indicate the anticipated
duration of the restriction, but will not include any other information about
the nature of the restriction or its applicability to Seller and will not in any
way communicate any material nonpublic information about Isis or its securities
to Broker.
17. Seller understands and agrees that so long as it is an
"affiliate" of Isis for purposes of Rule 144 under the Securities Act, all sales
under the Plan will be in accordance with Rule 144. Seller agrees not to take
any action that would cause Seller to aggregate sales under the Sellers Plan
with sales of other securities of the issuer pursuant to Rule 144, and not to
take any action that would cause the sales under the Plan not to comply with
Rule 144.
18. Seller agrees to complete, execute and deliver to Broker Forms
144 for the sales to be effected under the Sellers Plan at such times and in
such numbers as Broker reasonably requests. The "Remarks" section of each Form
144 will state that the sale is being made pursuant to a previously adopted plan
intended to comply with Rule 10b5-1(c) and will indicate the date the Sellers
Plan was adopted and that the representation is made as of such date.
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19. Seller agrees to make all filings, if any, required under
Sections 13(d), 13(g) and 16 of the Exchange Act in a timely manner, to the
extent any such filings are applicable to Seller.
20. Seller agrees that Seller will at all times during the Sales
Period, in connection with the performance of the Sellers Plan, comply with all
applicable laws, including, without limitation, Section 16 of the Exchange Act
and the rules and regulations promulgated thereunder.
21. Seller will notify Broker and Isis of any other purchase or
sale transactions involving securities of Isis that are not contemplated by the
Trading Plan.
Very truly yours,
---------------------------
[name]
[address]
[telephone]
[fax]
AGREED: ACKNOWLEDGED:
Golden Triangle Securities LLC Isis Pharmaceuticals, Inc.
_________________________
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Xxxxxx Xxxxxx B. Xxxxx Xxxxxxxx
President Executive Vice President
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